HomeMy WebLinkAbout930293 RESOLUTION
RE: APPROVE MODEL AMENDMENT CONCERNING CHANGE TO 401(K) SAVINGS PLAN AND
AUTHORIZE CHAIRMAN TO SIGN - PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
WHEREAS, the Board of County Commissioners of Weld County, Colorado,
pursuant to Colorado statute and the Weld County Home Rule Charter, is vested
with the authority of administering the affairs of Weld County, Colorado, and
WHEREAS, the Principal Mutual Life Insurance Company has presented the
Board with a Change to Comply with Section 401(A) (31) of the Internal Revenue
Code as Added by the Unemployment Compensation Amendments of 1992 by Adoption of
Model Amendment Pursuant to Rev. Proc. 93-12 concerning the 401(K) Savings Plan,
effective as of January 1, 1993, with the further terms and conditions being as
stated in said amendment, and
WHEREAS, after review, the Board deems it advisable to approve said
amendment, a copy of which is attached hereto and incorporated herein by
reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld
County, Colorado, that the Model Amendment, presented by the Principal Mutual
Life Insurance Company, concerning a change to the 401(K) Savings Plan be, and
hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the Chairman be, and hereby is,
authorized to sign said amendment.
The above and foregoing Resolution was, on motion duly made and seconded,
adopted by the following vote on the 7th day of April, A.D. , 1993.
L / BOARD OF COUNTY COMMISSIONERS
ATTEST: �%JG�� WELL ,COUNTY, COLORADO
Weld County Clerk to the oard ( ' (y am ( ei�
./� Constance L. H rbert, Chairman TAP
BY:
�Pr r -Tem
Cle k to the Board H W. H Webste , TeemAPPROVED AS FORM: Gw .
e . Baxte
G
County Attorney DalF K. Hall Qom 7 � �
j 4 O
/Barbara J. Kirkme er
930293
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Financial Principal Mutual
Group Life Insurance Company
March 31 , 1993
Ms . Diana Vasquez
Weld County Annuity Contract Number ( 3 ) 66947
915 10th Street
P . O . Box 758
Greeley , CO 80632-0758
RE WELD COUNTY 4O1(K) SAVINGS PLAN
Dear Ms . Vasquez
Effective January 1 , 1993 , the law requires all pension plans
to include a "direct rollover" provision . This provision
allows terminated plan members to roll their pension funds from
their previous employer ' s plan to their new employer ' s plan or
to an Individual Retirement Account ( IRA) .
The enclosed Model Amendment adds the direct rollover provision
to your plan . PLEASE SIGN THE AMENDMENT AND RETURN IT TO ME IN
THE ENVELOPE PROVIDED . Because the law requires this
amendment , I will contact you if we don ' t receive a signed copy
within four weeks .
The Model Amendment is part of the plan and you should include
it when you file the plan with the IRS . We will include a copy
of the amendment with the next qualification material we
prepare for you .
Please call me toll-free at 1-800-543-4015 , ext . 88570 if you
have any questions about the Model Amendment .
Sincerely
Chris Adam
Administration Specialist
Pension Administration
Phone ( 515 ) 248-8570
Enclosures
79 - 02 637 2016
930293
PC:PQ/,? Des Moines, Iowa 50392-3970
F145UN-1
CHANGE TO COMPLY WITH SECTION 401 (A) ( 31 ) OF THE
INTERNAL REVENUE CODE AS ADDED BY THE UNEMPLOYMENT
COMPENSATION AMENDMENTS OF 1992 BY ADOPTION OF
MODEL AMENDMENT PURSUANT TO REV . PROC . 93-12
The Plan described below gives the undersigned the right
to amend it at any time . According to that right , the Plan is
amended by adopting the Model Amendment set forth below,
effective as of January 1 , 1993 .
ARTICLE I : The following words and phrases are added to the
DEFINITIONS SECTION of ARTICLE I :
DIRECT ROLLOVER: A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee .
DISTRIBUTEE : A Distributee includes an Employee or former
Employee . In addition , the Employee ' s or former Employee ' s
surviving spouse and the Employee ' s or former Employee ' s spouse
or former spouse who is the alternate payee under a qualified
domestic relations order , as defined in section 414(p ) of the
Code , are Distributees with regard to the interest of the
spouse or former spouse .
ELIGIBLE RETIREMENT PLAN : Eligible Retirement Plan is an
individual retirement account described in section 408 (a) of
the Code , an individual retirement annuity described in section
408 (b) of the Code , an annuity plan described in section 403 (a)
of the Code , or a qualified trust described in section 401 (a)
of the Code , that accepts the Distributee ' s Eligible Rollover
Distribution . However , in the case of an Eligible Rollover
Distribution to the surviving spouse , an Eligible Retirement
Plan is an individual retirement account or individual
retirement annuity .
ELIGIBLE ROLLOVER DISTRIBUTION : An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee , except that an
Eligible Rollover Distribution does not include : any
distribution that is one of a series of substantially equal
periodic payments ( not less frequently than annually ) made for
the life ( or life expectancy) of the Distributee or the joint
lives ( or joint life expectancies ) of the Distributee and the
Distributee ' s designated Beneficiary, or for a specified period
of ten years or more ; any distribution to the extent such
distribution is required under section 401(a) ( 9 ) of the Code ;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities ) .
( 3 ) 6694
ARTICLE IX: The following section is added as Section 9 . 01A --
Direct Rollovers .
This section applies to distributions made on or after
January 1 , 1993 . Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributee ' s
election under this section , a Distributee may elect , at the
time and in the manner prescribed by the Plan Administrator , to
have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover .
Executed this 7th day of April , 19 93
FOR THE EMPLOYER
By
Constance L. Harbert • 04/12/93
Title Chairman, Weld County Board of Commissioners
( 3 ) 66947
42`7/1241
20% TAX WITHHOLDING
LAW CHANGE A law change affects retirement
plan payouts made after
December 31 , 1992 . Pension
provisions in a bill ( H . R . 5260 )
signed by President Bush on
July 3 , 1992 , try to encourage
more employees to save benefits
until retirement .
Mandatory Withholding The law requires payors to
withhold 20% of any cash payouts
made from qualified or tax-
deferred annuity ( TDA) plans
for prepayment toward their
income taxes . Plan members
may not elect out of this
withholding tax. Withholding
applies even if the member
decides later to roll over the
cash payout within 60 days . If
members want to roll over the
entire amount , they can use other
funds to provide the 20% withheld .
To avoid the 20% withholding ,
members may ( 1 ) leave their money
in the plan, or ( 2 ) ask the plan
sponsor to roll their money
directly into an IRA or qualified
plan that accepts rollovers .
Members pay no tax on amounts paid
directly to an IRA or qualified
plan until they receive benefits .
Direct Rollovers
- Plans with payout After December 31 , 1992 , all
choices qualified and TDA plans must offer
direct rollovers to members
eligible for cash payouts . The
plan sponsor must give plan
members information about their
choices before paying benefits .
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Plans must offer to roll over a
member ' s money directly to either
( 1 ) an IRA, or ( 2 ) a qualified
defined contribution plan -- if
the plan accepts rollovers .
Members requesting direct
rollovers must provide all the
information needed for the
rollover . The plan sponsor
doesn ' t need to confirm the
information .
- Plans that receive Plan members may ask to roll their
rollovers payouts directly to another
employer ' s plan only if the plan
accepts these rollovers . A plan
sponsor may choose not to accept
direct rollovers .
Broadened Rollover Rules This law change also simplifies
tax-free rollover rules . The
law lifts the restriction that
members must roll over at least
50% of the benefit payable tax-
free . After December 31 , 1992 ,
plan members may roll over any
amount paid to them , except :
- Required minimum distributions ;
- Employee after-tax voluntary or
required contributions ( i . e . ,
employee already paid taxes on
these funds ) ; or
- Periodic distributions paid;
- over the life expectancy of
the member ( or joint lives of
the member and beneficiary) ,
or
- over a period of at least 10
years .
After December 31 , 1992 , a member
may take several payout types at
the same time or several different
payouts over a period of time .
Any payouts not considered
"periodic" (described above ) may
now be rolled over . An example
9 '0293
given with the new law may
describe it best . A terminated
employee may roll over 30% of
his/her pension benefit and choose
to receive 70% in an annuity . The
employee delays taxes on the
amount rolled over to an IRA ( or
qualified plan) , but pays taxes
on the annuity payments . Annuity
payments are periodic payments , so
they can ' t be rolled over .
Questions? Please call our benefit
specialists at 1-800-255-6613 if
you have any questions about this
law change .
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